Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (10) TMI 609 - AT - Income TaxDeemed dividend u/s 2(22)(e) – Loan received from M/s. Morgan Credits (P) Ltd. - Business of investment in shares/securities of listed companies - Held that:- The assessee-company is not a shareholder holding the required percentage of shares in any of the two companies – Following the decision in COMMISSIONER OF INCOME TAX Versus ANKITECH PVT LTD. & OTHERS [2011 (5) TMI 325 - DELHI HIGH COURT] - such a loan or advance given to the shareholders or to a concern, would not qualify as dividend. It has been made so by legal fiction created under s. 2(22) (e) of the Act - Thus, by a deeming provision, it is the definition of dividend which is enlarged. Legal fiction does not extend to "shareholder" - under no circumstance, it could be treated as shareholder/member receiving dividend - If the intention of the legislature was to tax such loan or advance as deemed dividend at the hands of "deeming shareholder", then the legislature would have inserted deeming provision in respect of shareholder as well, that has not happened - the loan of ₹ 27.75 crores received is not to be treated as deemed dividend u/s 2(22)(e) of the IT Act – Decided in favour of asssessee.
|